Ethics and Conflicts — Parallel Investigation Risk, Payday Lender Blackmail Conflict Appeal, More Trump Firm Response News
Posted on“Avoiding Legal Ethics Minefields in Parallel Investigations” —
- “If recent events are any indication, the use of parallel investigations in the U.S. is expected to widen, and with it, the need for attorneys to navigate ethics quagmires.”
- “The breadth of such investigations has expanded in recent years to include, for example, educational institutions hauled before Congress to testify about campus antisemitism. Now, diversity, equity and inclusion (DEI) programs are expected to be under scrutiny by Congress and the administration.”
- “William J. Murphy and Catherine S. Duval, leaders of Zuckerman Spaeder’s Legal Profession and Ethics practice, who represent clients in parallel investigations, say they expect that scope to continue to broaden, given the political and governmental climates. That means increased pressure on lawyers who counsel clients in simultaneous criminal, civil, congressional, regulatory and administrative matters.”
- “As Murphy explains, it’s like looking around the corner to figure out whether the course taken in one setting will ‘blow up in a way that’s going to harm your client in some future setting that you may not yet anticipate… Things that the lawyers might ordinarily think were protected by privilege or by their work product may not be. Or a court may rule that the privilege no longer applies.'”
- “One unique challenge is that Congress does not recognize attorney-client privilege. ‘If you are producing something to Congress, they will press for material that would not be discoverable in another context. But once it is produced somewhere, that could vitiate the privilege protection somewhere else,’ says Duval.”
- “‘Attorneys have ethical and other obligations to preserve their clients’ secrets and privileges. But you’ve got a congressional entity saying that they trump that,’ she adds.”
- “Another challenge is confidentiality, so knowing the ground rules is crucial. ‘There are entities that won’t guarantee confidential treatment,’ and may even post the materials at issue to a public website, Duval says.”
- “Furthermore, when it comes to appealing an order to produce documents, the likelihood of success varies, according to Murphy. In some jurisdictions, ‘someone has to be held in contempt and refuse to comply with the order’ to make it appealable, he says.”
“Payday Lender Gets Appeal On Lawyer’s Blackmail Conflict” —
- “The Second Circuit has decided to let a former payday lending executive, now incarcerated on charges that he ran a fraudulent $2 billion lending scheme, move ahead with a new appeal after hearing that his trial counsel faced blackmail from another client.”
- “A circuit panel found Tuesday that ex-payday exec Scott Tucker argues convincingly that his appointed lead trial lawyer, Lee Alan Ginsberg, faced a conflict when he cooperated during Tucker’s trial with prosecutors from the Southern District of New York in an unrelated blackmail case.”
- “‘Specifically,’ the panel said, ‘the COA is granted as to the following issue only: Whether an unwaivable conflict was presented where petitioner’s appointed trial counsel engaged in a proffer session with members of the same U.S. Attorney’s Office that was prosecuting petitioner, about two weeks into petitioner’s trial, because trial counsel faced potential criminal exposure for matters not related to the charges against petitioner, and the district court did not appoint petitioner independent counsel for the Curcio hearing.'”
- “A Curcio hearing is a proceeding aimed at ensuring that a client understands his attorney’s potential conflicts of interest.”
“Tucker’s current lawyer, Benjamin Silverman, told Law360 in an email that he and his client are grateful that the court ‘is taking seriously what happened to Scott Tucker’ and the errors that compromised his trial.” - “‘Last month, the government presented only procedural defenses without even attempting to defend what happened at the trial in 2017,’ Silverman wrote. ‘The more that comes to light, the clearer it becomes that the convictions must be vacated.'”
- “But filings that weren’t seen during the first appeal show that lead trial counsel Ginsberg during the trial was cooperating with SDNY prosecutors in the blackmail case.”
- “‘I was blackmailed and defrauded by a former client,’ a Ginsberg affidavit said.”
- “That wrinkle emerged in the middle of Tucker’s trial and prompted a semi-secret conflicts hearing called by Judge Castel on Sept. 25, 2017, during which, according to March 4 statements, Tucker waived any conflict and elected to keep Ginsberg as his attorney and go forward.”
- “The blackmail had nothing to do with Tucker or his case, but it put Ginsberg in the uncomfortable position of working with prosecutors from the same office that was seeking to convict his client, according to filings.”
- “Judge Castel, citing myriad factors, concluded in an opinion last year that the blackmail case did not cause Tucker sufficient prejudice as to allow him a second shot in the circuit.”
- “But that didn’t seem to sit well Tuesday with Judge Merriam, who noted that no independent conflicts lawyer was on hand to advise Tucker during his long-ago Curcio hearing.”
- “Judge Merriam also wondered whether other members of Tucker’s team, including Ginsberg’s trial co-counsel Beverly Van Ness — who also represented Tucker during his first appeal — were also conflicted.”
- “Judge Merriam called it a ‘Catch-22’ in which Tucker’s appellate lawyer was ‘potentially not in a position to raise the argument that he now wishes to raise’ either because of incomplete knowledge of the blackmail issue or the fact that she also was on the trial team.”
“Law firm targeted by Trump could have been ‘destroyed,’ chairman says in explaining deal with Trump” —
- “The chairman of a prominent law firm who cut a deal with President Donald Trump last week to avert the consequences of a White House executive order told colleagues in an email Sunday that he did so because the order ‘could easily have destroyed our firm’ and put it out of business.”
- “The message from Brad Karp offers the most detailed public explanation yet about the decision to make significant concessions to the White House in the face of an executive order that targeted his firm, Paul, Weiss, Rifkind, Garrison & Wharton.”
- “The resolution triggered an intense backlash within the legal community, with lawyers criticizing the firm for capitulating to Trump rather than standing up to him, particularly at a time when he’s using the power of the presidency to threaten the livelihoods of attorneys and companies he believes have crossed him. The deal also reinforced Trump’s recent success in extracting concessions from a broad swath of targets, in both academia and private industry, who have opted to compromise rather than fight.”
- “In an email to Paul Weiss employees obtained by The Associated Press, Karp described the order as having presented an ‘existential crisis’ for the firm. He said it was very likely the firm would not have survived a protracted fight with the Trump administration.”
- “‘The executive order could easily have destroyed our firm,’ Karp wrote. ‘It brought the full weight of the government down on our firm, our people, and our clients. In particular, it threatened our clients with the loss of their government contracts, and the loss of access to the government, if they continued to use the firm as their lawyers. And in an obvious effort to target all of you as well as the firm, it raised the specter that the government would not hire our employees.'”
- “Karp wrote that the firm was initially prepared to challenge the executive order in court, something another law firm targeted with a Trump executive order, Perkins Coie, has done. Even as a team of attorneys prepared a complaint, he said, ‘it became clear that, even if we were successful in initially enjoining the executive order in litigation, it would not solve the fundamental problem, which was that clients perceived our firm as being persona non grata with the Administration.'”
- “He also said that the support he hoped the firm would receive from other law firms never materialized.”
- “‘Disappointingly, far from support, we learned that certain other firms were seeking to exploit our vulnerabilities by aggressively soliciting our clients and recruiting our attorneys,’ he wrote.”
- “Against that backdrop, when the firm learned that the administration might be willing to cut a deal, it sought to do so and negotiated a settlement in a ‘matter of days.'”
- “‘I know many of you are uncomfortable that we entered into any sort of resolution at all. That is completely understandable,’ Karp wrote to his colleagues, adding that ‘there was no right answer to the predicament in which we found ourselves.'”
- “He added: ‘It is very easy for commentators to judge our actions from the sidelines. But no one in the wider world can appreciate how stressful it is to confront an executive order like this until one is directed at you.'”
- “Trump’s new memo underscores how far removed this President, Attorney General and Administration are from our nation’s Constitution and bedrock values. Our liberties depend on lawyers’ willingness to represent unpopular people and causes, including in matters adverse to the Federal Government. An attack on lawyers who perform this work is inexcusable and despicable.”
- “Our profession owes every client zealous legal representation without fear of retribution, regardless of their political affiliation or ability to pay.”
- “We encourage law firm leaders to sign on to an amicus effort in support of Perkins Coie’s challenge to the Administration’s executive order targeting the firm, and to resist the Administration’s erosion of the rule of law.”